Welfare Reform

"This is not the end of welfare reform, this is the beginning, and we have to all assume responsibility."

-- Bill Clinton, August 22, 1996

With those words, President Bill Clinton signed welfare reform legislation largely authored by congressional Republicans, making good on his now-famous promise to "end welfare as we know it." The new law replaced the 61-year-old federal guarantee of aid to the poor with a system of block grants to the states that imposes work requirements and a 5-year lifetime limit on benefits, while denying aid to all immigrants, legal or otherwise.

So is the debate over, poverty vanquished, time to hit the beach?

Unfortunately, no. While the new law (entitled the Personal Responsibility and Work Opportunity Reconciliation Act of 1996) will save the federal government a great deal of money and is a milestone in the decades-old debate over welfare, it really was, as Clinton noted, just the beginning of state-level experimentation which ultimately will determine the success or failure of welfare reform.

Will It Work? Already the states have begun grappling with the new law in different ways. And Washington has already begun to tinker, with budget negotiators agreeing May 2 to restore $13 billion in aid to legal immigrants and expanded food stamp benefits.

As events unfold, a host of unresolved questions are being slugged out in Washington and in state capitals. Among the uncertainties:

How will the states respond? Welfare reformers said governors needed the authority to innovate and to tailor their welfare programs to their respective populations' idiosyncracies. But some worry that states, seeking to avoid an influx of poor from elsewhere, will cut benefits in a "race to the bottom."

Can welfare recipients find jobs? At just under 5 percent, the nation's unemployment level is at historic lows, and about as low as economists expect it can be. What happens, some worry, during economic downturns? And do the poor have adequate skills to become employed? And what about those regions of the country where jobs are more scarce?

Will the law increase poverty? What happens to welfare recipients if they exhaust their 5-year lifetime benefits and can't find work? And will the new law's savings create hardship even sooner? The Washington-based Urban Institute has predicted the new law will push some 1.1 million children below the poverty line.

Will legal immigrants get aid? For now budget negotiators have agreed to restore welfare benefits to immigrants, but the idea still has to be sold to the full Congress. By August 1, some 500,000 elderly, blind and disabled legal immigrants could lose cash benefits, 600,000 will be off Medicaid, and up to a million will lose food stamps.

Welfare backers say that jobs are available, and that faced with new incentives, former welfare recipients can achieve self-sufficiency. Indeed, some analysts are already pointing to an 18-percent drop in welfare caseloads during the last year as early evidence the law is working.

"Preliminary reports show that, in every state but Hawaii, welfare caseloads have dropped," wrote the editors of The New Republic magazine in March. "So far it seems the logic behind welfare reform was right: now that the incentives have changed, welfare recipients are making better decisions."

But this experiment in federalism will take not just months but years to assess. As it unfolds, we can expect new issues to appear, and old arguments to be rehashed.